Ad Blockers: A Wake-Up Call, Not a Solution

Publishers are expected to lose $20.3 billion in ‘blocked’ revenue by the end of 2016. PHOTO: *sax

The recent acceleration of ad blocking points to a growing dichotomy between digital publishers and consumers.

This is not to say consumers outwardly deny what advertising underwrites; many are certainly aware and even willing to pay for ad-free alternatives. Rather, it suggests the exchange of content for our attention — the current ad model — has become a bit obscured.

A Matter of Ad Relevance

In one of the many industry efforts to remove such obscurities, Facebook recently announced it would begin providing users with more control over their ad experiences.

The social network contends that irrelevance is the main culprit behind consumer distaste for advertising, and that by giving users control over what ads they see, they will succeed in discouraging the use of ad blockers altogether.

After all, consumers rely on advertising to make $10 trillion in annual purchase decisions — why eliminate all ads when they can often be useful and relevant?

Facebook’s message joins a chorus of ad-dependent publishers. Many who are attempting to stay afloat and edify the millions of consumers fed up with intrusive ads about alternatives to ad blocking.

Publishers Will Lose $20.3B

While certainly an industry wake up call, the autocratic nature of ad blocking makes finding a consensus nearly impossible, and we can only speculate how it will alter online media in the long run.

The short-term effects however are already clear. Studies predict that publishers will lose $20.3 billion in ‘blocked’ revenue by the end of this year, a figure up 43 percent from 2015. For many honest companies, this could be the end of their road.

Despite efforts to recapture some of this lost revenue, a majority of publishers are choosing not to work with ad blockers and their hypocritical revenue models.

Sourcepoint, a company that measures the impact of ad blocking, states less than 9 percent of American and 8 percent of European media publishers have any intention of paying ad blockers an admission fee to access their own audiences.

The ad block debacle is no longer a chase of cat and mouse. It is a game of chicken and what’s at stake is the digital media ecosystem as we have come to know it.

How Did We Get Here?

Publishers keen on reaching an accord with their audiences must remember that the concept of ad blocking is by no means a new one.

Since the 1960’s, when the TV remote was first introduced to the American market, people have skimmed past commercials freely by simply changing channels. Similar capabilities appeared in broadcast radio when station presets made their way into automobiles and stereos across the world.

And for years now, consumers have indulged in commercial free experiences through DVRs and over-the-top content (OTT) platforms, albeit at a cost.

The Intimacy of New Media

It’s no secret the staunch desire for ad-free media has persisted through the years. Perhaps the only things that have changed are the mediums in which people prefer to consume it.

The move to digital and mobile put content into a much more intimate consumer context, in the palms of our hands and appearing across every screen, at work, on the go or at home.

In 2007, publishers would encounter the first online ad blocker of its kind. AdBlock Plus would make its debut on Mozilla Firefox that year, a relatively new browser notable for its third-party friendliness. But it would only begin to see major traction in 2013, coinciding with a monumental shift in media consumption behavior.

Consumers were now spending more time in digital than ever before and for the first time, digital time spend would eclipse time spent watching television.

It was during this digital pilgrimage that consumers would become more critical of advertising, and content creators perhaps less judicious of its value exchange. The natural differences in both mediums factored to this change.

The Nature of Digital

TV and radio programs are linearly structured, predominantly focused around entertainment, and predictable in terms of when an ad will be shown.

In digital, our experiences are quite varied, horizontal, and expand beyond entertainment to permeate nearly every aspect of our personal lives, from how we communicate, do business, and even socialize. Anything that disrupts or detracts from that integral digital experience is considered intrusive and must go.

Digital publishers have also had more liberty over their monetization strategies than traditional publishers.

Ads could come in all different shapes and sizes, could be placed strategically for higher engagement or impact, and this was often done with little consideration for the end-user experience, inevitably fueling the ad blocking flame.

A Third of PVs Blocked?

Today, more than 200 million web users around the world have activated an ad blocker in their browser and 41 percent of those users have come within the last year alone. By some estimates, this equates to 32 percent of total page views blocked globally.

The issue with ad blocking is not the user desire for disruption-free experiences, nor is publishers at fault for attempting to monetize their work.

The issue lies in the bulldozer approach by ad blockers and their presumption that they are offering the only solution to address consumer dissatisfaction.

It is a knee-jerk response at best that masks its contradictory revenue model behind loose promises of a better web. It hinders any conciliation between publishers and their readers, forcing them to push interim monetization solutions that either pay-gate or limit accessibility to information that would otherwise be available to us for free.

In this environment, ‘ad-free’ articles and ‘commercial-free’ media are much more likely to carry stronger sponsor overtones and obvious corporate benefactors rather than a candid need to inform. Will ad block users ask for compromise then?

Moving Forward

As ad blocking’s catch-all effect continues to disturb even the most honest of content providers, digital giants are chiming in with their own attempts to level the playing field.

Last month, in addition to disabling ad blockers from its site and offering users more control over their ad experiences, Facebook announced plans to penalize ads that lead to web pages with long load times, a common reason behind ad blocker use.

The industry commends the move as it invites advertisers to be conscious of the user experience, play a role in reversing ad block adoption, and work towards a common goal.

A week after this announcement, Google announced a solution of its own. The search engine plans to implement a new algorithm that will retroactively handicap web sites in its search results that cover main content with interstitials or pop-ups immediately upon page load, a practice considered disruptive according to IAB ad blocking primer guidelines.

Google’s involvement is important to note here, as the IAB cannot enforce their rulings alone, only create guidelines for which the industry should follow. Google’s web authority is proof that when the industry does work together, it can absolutely find middle ground.

The Mobile Response to Ad Blocking

While largely popular in mobile gaming circles, rewarded units are a growing ad format among utility and entertainment apps, prized for their ability to engage users and reward them with in-game goods, digital currency and the like, in return for their interaction with an ad.

Christian Calderon, CRO of Ketchapp has said that, “Player are very happy with rewarded video. On Two Dots, we did a test where we took out the ad unit, users were upset and wrote reviews asking for us to incorporate the rewarded video unit back into the game.”

It’s always a good sign that your ad monetization is not intrusive when your users ask for more.

The absolutist approach to ad blocking, I believe, is misguided. It creates an environment where digital content creators must feel as though they have to ask for forgiveness, rather than work together to find a solution.

While we can argue ethics, it’s clear that in order to find consensus between fatigued users and the free content ecosystem we’ve come to enjoy, industry-wide cooperation is required, not the tyrannical sovereignty of ad blockers.

To ensure this, the industry must continue prioritizing consumer experience over ad space, promote better formats over intrusive ones, and be always user-conscious over voluntarily following poor habits for profit.

Only then can the outlook towards advertising change and lay the groundwork for the next generation of ad practices.

About the Author

Gil Shoham is CRO and Cofounder of ironSource. With an extensive online media background, Gil is a sought-out speaker and thought leader on mobile monetization and marketing.

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